Date: Fri 05-Mar-1999

Publication: Bee

Author: STEVEB

Quick Words:

tax-liens-Spragg-

Full Text:

Tax Lien Sale Brings Money To Town's Coffers

BY STEVE BIGHAM

Finance Director Ben Spragg said late last week that Newtown has sold 197

municipal tax liens to Transamerica of North Palm Beach, Florida, at a cost of

$427,211.94. The proceeds will be transferred to the town's capital

non-recurring reserve fund to help offset taxes in the 1999-2000 budget.

Of that number, only $286,943 was for the actual taxes. The remaining $135,000

was interest payments that are due.

Mr Spragg said Transamerica was chosen because it came through with the

highest bid. The agency is likely to charge those delinquent taxpayers an 18

percent interest fee.

"This is first time we've sold tax liens, and it was anticipated that we'd

sell $1.7 million worth," the finance director said.

However, the town notified its delinquent taxpayers of the plan to sell the

liens and several of them came forward. Apparently, they would rather deal

with the town than a outside agency. Many of those who came forward either

paid their taxes in full or set up a payment plan. Taxpayers have either paid

or set up payment plans for more than $500,000 in delinquent taxes, according

to Tax Collector Carol Mahoney. Her office also collected $440,000 up to the

point where the town decided to go out for the lien sale.

Newtown still has about $213,000 worth of unpurchased liens. Companies showed

little interest in these liens because the property is located on vacant land.

"Companies prefer not buying those. I guess it's because there is no house or

door to go knock on for the money," Mr Spragg said.

The finance department plans to investigate the possibility of turning those

remaining liens over to a collection agency.

State legislators only recently passed a law permitting the sale of tax liens

and several other towns have taken up the practice.

The Legislative Council voted to sell the tax liens this past June, following

a recommendation from member Donald Studley.